Trends in offshore energy

Training, technology help overcome skill shortage

July 28, 2009

The welding industry is known for a persistent shortage of skilled workers, and the energy sector is no exception; meanwhile, offshore welding is getting more rigorous. The easiest-to-find oil sources were discovered long ago; with each passing year, energy companies go into harsher environments (deeper waters) to find petroleum and natural gas. Drilling into deeper waters means dealing with higher pressures and colder temperatures, and many companies have been switching too high-strength pipe, which tends to be more difficult to weld than common pipe.

Although Hurricane Katrina lasted just seven days from start to finish, it was among the most destructive natural disasters in the history of the U.S. The flooding, damage to residential districts, displacement of residents, and loss of life captured the headlines and the toll—1,836 lives lost and more than $81 billion in property damage—was immense.

Although the storm made landfall in Louisiana on August 29, 2005, the property damage started before that. The costliest and fifth deadliest hurricane on record damaged or destroyed 30 oil platforms and caused nine refineries to close, shutting down 24 percent of the region's oil production capacity and 18 percent of its gas production capacity. The price of West Texas Intermediate, a benchmark crude oil, jumped 11 percent from July to September in 2005, while the average retail price for gasoline increased 26 percent during the same period.

Among other problems, the storm highlighted the insatiable and growing demand for energy. The U.S.'s demand for crude oil increased 11 percent during the past 20 years, according to the Energy Information Administration. This isn't just a domestic situation. According to the International Energy Agency's World Energy Investment Outlook, the world's demand for energy is expected to increase by 66 percent from 2001 to 2030. The upside is a benefit to fabricators involved in the energy sector, because demand growth will be accompanied by infrastructure growth. The world's energy-supply infrastructure investment is likely to total $16 trillion during this 30-year period; about half will be spent on repairs of existing facilities and half spent on expanding capacity.

While electricity generation, transmission, and distribution will dominate spending at $10 trillion (60 percent of the total), and coal will garner a paltry $400 billion (2 percent), investment is likely to be a respectable $3.1 trillion (19 percent) for oil and a similar amount for natural gas.

In the oil sector, worldwide demand is expected to go from 77 million barrels per day (BPD) to 120 million BPD. The investment for new capacity and replacing obsolete facilities will total 200 million BPD of production capacity. Approximately $2.2 trillion will be devoted to exploring and developing facilities for conventional oil; $257 billion will go toward tankers and pipelines; and $412 billion will go toward refineries.

This is sure to be a boon for fabricators and welders who understand the market, know the codes, and have the right equipment.

The Perfect Storm

Hurricanes are only one part of the story. The offshore oil and gas industry is plagued by many other problems these days. Harsh environments, difficult-to-weld materials, ever-more-stringent inspections, and a continuing lack of skilled welders are playing havoc on the contractors in this industry.

Foremost is the location of petroleum sources. The easiest-to-find oil sources were discovered long ago; with each passing year, oil companies must go into harsher environments to find petroleum. They're drilling deeper than ever before, so the pipes—and the welds that hold them together—must endure higher pressures and colder temperatures.

"We're seeing new materials being introduced, and these materials require stricter welding materials and stricter inspections, so the level of competence required to carry out these welds has definitely gone up," said Mike MacGillivary, international sales manager for Hobart Bros. Inc. "And there are issues related to welder training. These new materials have mechanical property requirements—higher tensile strength and higher yield strength—that make them more difficult to weld. Also, because we're going into deeper, colder water, we're starting to see higher impact requirements and CTOD requirements. These weren't issues in the past in warmer waters."

The CTOD test, or crack tip opening displacement test, evaluates a material's sensitivity to failure after a crack develops.

"To achieve the mechanical properties typical of these higher-strength materials, steel manufacturers alter their chemistry, or change their manufacturing methods. Either of these factors can have a profound effect on the material's weldability," explained Michael Huelskamp, a welding engineer for Gulf Marine Fabricators, a company that designs and builds offshore platforms for the oil and gas industry. "A new chemistry might be beneficial to its strength or machineability, for example, but detrimental to weldability," he explained. "This doesn't mean it can't be welded. It just means that it will require a different approach. It can be as simple as using a different technique, or may require an entirely different welding process altogether," he said.

The added focus doesn't stop with the welding procedure.

"There is increased scrutiny on inspection now," MacGillivary continued. "Because we're dealing with higher-grade materials, a lot more attention is being paid. Welds that may have had lower inspection criteria before now have much higher criteria based on the fact that there is a new alloy being used," MacGillivary said.

Compounding these problems is the multitude of codes and requirements.

"In many cases, a product is produced in one region but shipped to a different region," MacGillivary said. "The codes that are predominant where the product is made may not be the codes that apply to the project. An example would be pipe produced in the U.S. but held to a European standard. This makes it difficult to manufacture products for this market. The market is worldwide, but there is a lack of harmony among the welding codes," he explained.

Finding, Training Welders. Another complicating factor is the lack of skilled welders.

"No matter where you travel in the world, there is a lack of skilled welders that can meet the requirements of the oil and gas market," MacGillivary said. This can be a bigger problem in less industrialized locales. "We're moving into areas of the world where people historically haven't been welders, so many of the contractors that serve this industry have to provide welder training," he continued. "At the same time, we're getting into these higher-grade materials, and the quality aspect of it is much more stringent that must be built into the training programs," he said.

On the other hand, experienced welders shouldn't have too much trouble with high-strength steels, according to Huelskamp.

"No classroom is a substitute for experience; that said, an experienced welder with a good classroom foundation, and a basic understanding of metallurgy, can adapt to welding other materials," Huelskamp said.

Fluctuations in the crude oil price make matters worse. Although West Texas Intermediate crude oil sold for $145 in the middle of 2008, it fetched just $35 per barrel in early 2009. High prices compress project timelines while low prices lead to project cancellations, MacGillivary said. The cyclic nature of the business leads to layoffs. In other words, when crude oil prices rise, contractors hire and train more welders; when crude oil prices fall, they lay off some workers. When prices later rise, many contractors find themselves scrambling, again, to hire and train welders quickly.

Some companies compensate by importing trained talent.

"Quite a few trained welders come from foreign countries," said Jim Kovach, an industry consultant. Other companies are looking for training opportunities here at home.

"Some oil companies are teaming up with vocational schools and exploring joint ventures," he said.

Turning to Technology. Many of the equipment and consumable suppliers are responding to these trends by developing products that deal with these problems.

"Technology has taken over some of the functions that traditionally have been done by higher-skilled welders," MacGillivary said. Substituting one process for another also helps bridge the training gap.

"For example, the metal-cored arc welding process is a lot more forgiving, so it's easier to train operators; the learning curve is a lot shorter, and the quality is higher," MacGillivary said. "Metal-cored wire can be combined with a pulsing power waveform, such as Miller's RMD™," he said, referring to Miller Electric Co.'s regulated metal deposition process. It is a software-controlled, modified short circuit gas metal arc welding (GMAW) process that lowers heat input to the workpiece and minimizes spatter. These characteristics reduce the likelihood of warping and reduce cleanup. RMD also compensates for changes in the contact tip-to-workpiece distance and optimizes the arc by monitoring and controlling the weld current, according to Miller.

Furthermore, on many power supplies, a supervisor can set an upper limit and lower limit for some of the parameters to help the welder produce a quality weld. It also allows the contractor to show that the welder is conforming to the specified welding procedures, MacGillivary said.

Consumables manufacturers likewise are developing products tailored to the demands of offshore applications.

"Hobart Bros. has developed niche products, especially for the offshore market. Instead of developing products that have mass appeal, we're developing products for specific industry segments or applications," he said.

"We designed a wire to replace stick electrode because, for some applications, stick electrode is the only filler metal available. The Xtreme 120 improves the quality of the welds, maintains the mechanical properties required, and increases the welders' productivity by about four times," he said, referring to a 120,000-PSI wire that Hobart manufactures specifically for this industry. In addition to high tensile strength, the wire also was formulated for high impact strength.

Likewise ESAB is interested in this market. One of its products, OK Tubrod 14.27, is an all-position flux-cored wire intended specifically for 22 Cr duplex stainless steel. An evaluation showed its potential to increase welding productivity as compared to shielded metal arc welding (SMAW). In this test, a 60-degree V butt weld in the 5G position on a 6-in. OD pipe with a 16-mm wall, the FCAW process took approximately 1/3 the time that SMAW required. Its impact strength is suitable for temperatures around -50 degrees C.

A field evaluation of 15,000 meters of duplex pipework, totaling 260 tons of product, had a defect rate of 0.044 percent when welded with this consumable; all other pipework had a defect rate of 0.59 percent.

Repairs

Construction isn't the only concern. The environment presents of a host of challenges that wreak havoc on installations, such as briny water, wave action, collisions, and storms. These lead to repairs. Lincoln Electric's SAE-400 Severe Duty, a diesel powered, engine-driven welding machine, was designed specifically for offshore applications. It uses a true DC generator with dual continuous output controls. It provides up to 400 amps at 100 percent duty cycle and has a heavy-gauge stainless steel case to help withstand the harsh offshore conditions. This particular machine also meets Mineral Management Service's (MMS) code for use on an offshore rig. It also can serve as a generator to run other power tools and support gouging applications.

Underwater pipe repairs are another big concern. The deeper the water, the longer and more expensive the repair is likely to be.

To address this problem, The E.O. Paton Electric Welding Institute developed a module that uses flash butt-welding to make underwater repairs. It handles pipes up to 12.75 in OD and 11/16 in. wall thickness. A diver assists by installing the machine on the pipe ends; the welding process itself is automated and does not require welder-divers.

A video camera first finds the location of the break; the diver then assists by moving the machine into position. The machine clamps to the pipes and serves as a welding chamber. Two plugs seal the pipes, and an inert gas displaces the water from the chamber, creating a suitable welding environment. The weld head incorporates shears that cut the pipe ends. The welding process, which is automated, takes less than three minutes, according to the company.

A Final Word on Offshore Energy

Extracting oil and natural gas are lucrative activities, and mankind won't exhaust the world's supplies anytime soon. However, drilling in deeper, colder environments drives up the cost, making other energy sources more attractive. Coincidentally, the offshore environment offers another energy source. It doesn't provide energy as consistently as fuels do, but it's easier to gather because it comes off the ocean's surface, not underneath its floor. Because it's fundamentally different from oil and gas, it likely will come with its own welding challenges.

Despite any potential drawbacks it may have, it might lead to the next big thing in the offshore energy industry, according to Kovach: wind tower construction.